Selling Online Without Breaking the Bank

Some distributors say they don’t offer e-commerce because their customers aren’t asking for it yet. Others — especially small and mid-sized distributors — say it’s simply too big and expensive of a project to take on, or that implementation is just too complicated. It isn’t a small project, but with the right corporate mindset, willingness to find help, e-commerce is certainly manageable for distributors of all sizes.

Epicor
Epicor
BROUGHT TO YOU BY: WHERE DISTRIBUTORS CAN FIND RESOURCES & HELP WITH e-COMMERCE IMPLEMENTATION TO START SELLING ONLINE WITHOUT BREAKING THE BANK WHY e-COMMERCE ISN’T AS DAUNTING AS YOU THINK 2 WHY e-COMMERCE ISN’T AS DAUNTING AS YOU THINK EXECUTIVE BUY-IN Like with any new company project, e-commerce has to start at the top, as full executive support is key to its success. Without it, hiccups in funding and the overall implementation process are more likely. “You need to have that executive sponsorship. If they’re interested in long-term ROI and long-term customer behavior, then e-commerce is right for them,” says Caroline Ernst, Vice President of eCommerce at AD, a well-known association in the B2B distribution market. “When we talk to our members, we try to understand if e-commerce is a priority. If it is, it’s likely to be successful.” Industrial Distribution’s 2017 survey asked its readership — primarily comprised of small and mid-sized distributors — if e-commerce is a priority for them (figure 2). Sixty-three percent of respondents said yes — up more than three percentage points from a year earlier. That’s a good sign for e-commerce usage for the market, but again, shows plenty of room to grow. KNOW WHAT YOU WANT The worst-case scenario in e-commerce is investing major capitol in buying a platform that doesn’t match your customer wants or needs — or those of your own business — and it ends up failing. This In Industrial Distribution’s 2017 Survey of Distributor Operations, 57 percent of respondents said they currently generate web-based revenues (figure 1) — up 1.2 percentage points from the publication’s 2016 survey. While that figure has steadily increased over the years, that 57 percent figure shows there is still a considerable amount of distributors yet to get involved with selling online. Some distributors say they don’t offer e-commerce because their customers aren’t asking for it yet. Others — especially small and mid-sized distributors — say it’s simply too big and expensive of a project to take on, or that implementation is just too complicated. It isn’t a small project, but with the right corporate mindset, willingness to find help, e-commerce is certainly manageable for distributors of all sizes. But some distributors are still hesitant to start selling online. By now, it seems everyone in B2B organizations has accepted that e-commerce will only continue to grow as the preferred buying method by their customers. Are industrial distributors currently generating online sales? FIGURE 1 WEB-BASED REVENUES 65.03% YES 34.97% NO 3 WHY e-COMMERCE ISN’T AS DAUNTING AS YOU THINK ties back to executive sponsorship, as the company needs to identify what its business needs are and what features will meet or exceed customer expectations. What e-commerce features do your customers want? Maybe they don’t need many, compared to other markets or larger competitors. Are you going to provide product content in-house? Are you comfortable with a platform that doesn’t require a lot of customization? The answers to these questions will help determine the cost of a platform, as those with advanced features and a high level of customization will be more expensive. Some distribution businesses don’t require all of that, some do. “It goes back to what your business needs are,” Ernst says. “You start with good, clear objectives, and then evaluate strategic providers. There are lots of opportunities if you have very clear objectives.” GETTING HELP Distribution executives experienced in e-commerce are often asked for advice in e-commerce implementation by peer companies and even competitors, and one of the first things they advise is to get help. E-commerce can certainly seem daunting when approached as a solo effort. There’s no need for it to be that way. Getting advice from fellow distributors and third-party implementation service can go a long way to avoiding pitfalls and headaches. There is also a bounty of e-commerce best practice articles, blogs and product reviews that curious distributors should make use of. These resources often discuss who the top and most reputable e-commerce providers are. “Make use of the best-practice sharing and leverage your own professional network,” advises Ernst. “For those who don’t have a strong network, there’s third-party research. See who they mention as top providers. Looking at third-party research gives you that good seal of approval.” Keeping an eye on successful competitors that have e-commerce is another good idea. Sure, you may not feel like adopting what your rivals are doing verbatim, but taking stock of their e-commerce features and content can give newcomers ideas of what to prioritize when shopping for a platform. “The best thing is go look at your competitors’ websites,” says Scott Assyia, vice president/general manager of industrial distributor Hanna Rubber Company. “We’ve done that. Go to Amazon and see what they’re doing. See how they’re positioning it.” Implementation itself is can be a turn-off for some distributors about e-commerce, especially those companies that lack tech- savvy staff or other in-house faculties to integrate a platform with their existing enterprise resource planning (ERP) system. This is where imploring the service of an e-commerce provider has the most benefit. Third party providers specialize in integrating an e-commerce platform with distributors’ business process and ERP system, eliminating the need for duplicate data entry and management of multiple product databases — leading to less overall operational costs. — Scott Assyia, Vice President/General Manager Hanna Rubber Company “ e-Commerce is a small percent of our sales, but it’s an area everyone wants and needs to have a hand in. That’s going to grow.” e-COMMERCE Is this a priority for industrial distributors? 59.8% YES 40.2% NO FIGURE 2 4 WHY e-COMMERCE ISN’T AS DAUNTING AS YOU THINK Business software provider Epicor recently launched a solution — Epicor Commerce Connect (ECC) — aimed to help distributors’ digital transition. Used in tandem with the popular Epicor Prophet 21 ERP system, cloud-based ECC is tightly integrated with the rest of a distributors’ business process, and in real-time. On the customer side, the end result is a modern e-commerce website focused on buying convenience and easy reordering. Whereas some third-party platforms come as an all-or-nothing solution — often bigger than a small or midsize distributor is ready for, ECC is based on an open source platform that gives users future flexibility to add new capabilities and features as they grow without being locked into one vendor’s ecosystem. Meanwhile, its turnkey features allow for rapid implementation so distributors can get their solution up and running fast. Epicor Software Corporation (epicor.com) provides industry-specific business software designed around the needs of manufacturing, distribution, retail and services organizations. Epicor’s more than 40 years of experience with its customers’ unique business processes and operational requirements is built into every solution — in the cloud, hosted or on premises. The information in this report was researched and produced by Industrial Distribution in conjunction with Epicor. Statistical data was researched and compiled by Advantage Business Media in April 2017. ABOUT THIS REPORT ABOUT EPICOR — Caroline Ernst Vice President AD eCommerce Solutions “ We think about it like your digital branch. If you’re opening a digital branch, e-commerce needs operations, financial support and partnerships.” There’s no doubt that more and more distributors will continue to add e-commerce as a business channel. Those that don’t risk weakening their competitiveness and falling behind customers’ changing buying habits. And while e-commerce isn’t a small project, there is plenty of help, resources and integration assistant available to ensure success. But it all depends on one question — is e-commerce a priority for you?